Sentient and JetDirect split into two companies

Sentient Jet and JetDirect once again are operating as separate companies after agreeing in late August to separate into their original elements. The two companies merged in April 2007 when JetDirect Aviation bought Sentient Jet, with the goal of matching the demand created by Sentient’s jet card and charter brokerage business with the available charter hours from JetDirect’s growing charter fleet.

JetDirect bought a number of charter companies before the Sentient merger, and the combined companies continued with acquisitions at a breakneck pace. The merged company, called Sentient Jet Holdings, eventually grew to 300 managed aircraft, 200 of which were on various charter certificates owned by companies purchased by JetDirect or the new Sentient Jet Holdings.

Around the middle of this year, as the market for charter began to decline, the merged companies started struggling to make ends meet. Sentient Jet Holdings faced cash-flow problems, including overdue payments to vendors that provided charter services to Sentient customers. The financial problems, according to Sentient Jet Holdings, had a lot to do with the challenge of consolidating what used to be 13 different accounting systems at the acquired companies. This resulted in Sentient not being able to ensure it received payments in a timely manner for the services it provided.

Until July, Steven Hankin was CEO of the combined Sentient Jet Holdings, having taken over from former CEO Gregory Campbell late last year. Campbell had been CEO of JetDirect before the merger and CEO of the combined companies until Hankin became CEO. In July, during the cash-flow difficulties, Hankin stepped aside and Campbell again took the reins as CEO.

On August 31, Macquarie Global Opportunity Partners bought the former Sentient jet card and charter brokerage businesses from newly formed JetDirect Aviation Holdings and renamed the business Sentient Flight Group. JetDirect retained the charter/management, aircraft maintenance and airport services businesses that were part of the JetDirect family before last year’s merger with Sentient.

Following the de-merger of the two companies, Hankin returned as CEO of the new Sentient Flight Group, which now consists of Sentient Jet Membership (jet cards), Sentient Jet Charter (charter brokerage) and AvBuy, a discount fuel-buying network for companies that work with Sentient.

Hankin told NBAA Convention News that the new Sentient had “largely completed the logistics of catching up on the payments we owed, and we expect to have that completed relatively soon. We’re very confident of the businesses in the Sentient brand now. Our goal is to have a good financial partner, make the payments we needed to make and get back to normal operations.”

As to why the combination of Sentient and JetDirect failed to yield the expected benefits of aggregating the demand and supply sides of the charter business, Hankin said, “I think it was a very difficult thing to do. There were very different perspectives on the direction to go, and those forces were always very powerful forces.”

Despite the formerly combined Sentient/JetDirect being a difficult and complex business, Hankin said he still believes that “the destination was an appealing and attractive value proposition.” But it was decided that the best way to move forward was to separate the two companies again. “For a variety of reasons,” he said, “some we’ll never know, this was viewed as the right answer.”

Hankin said he appreciates the financial backing of Macquarie Global Opportunity Partners, which is completely separate from Macquarie Infrastructure and its Atlantic Aviation FBO chain. “I’ve worked closely with them a long time,” he said. “They’re very good people, very fair, and have a lot of experience around the world. They know the aviation business and have proven to be great partners. I couldn’t be happier about our financial partners. The company’s value proposition is quite clear now.”